Shiba Inu fell 23% from its August high, and open futures contracts surged 81%

Shiba Inu Coin (SHIB) continued its decline, but derivatives activity rebounded against the trend.

Shiba Inu Coin (SHIB) continued to decline on Wednesday, trading around US$0.00000450. The token has retreated for the seventh consecutive trading day, and the weak technical structure has allowed bears to continue to dominate the market.

Prices fell, but derivatives activity recovered.

SHIB has fallen about 23% from its August high of US$0.0000583. The current price is down nearly 34% from its June high of US$0.0000671, indicating the magnitude of the overall market correction.

Although the downward trend continues, market data shows that activity in the SHIB derivatives sector remains active. Open interest in perpetual contracts currently stands at US$50.35 million, down only slightly by 2% in the past 24 hours. This level is 81% higher than the July low of $27.8 million, indicating a significant recovery in speculative activity.

The increase in open interest reflects that traders are putting more money into SHIB futures contracts, but the data does not clarify whether these positions are mainly biased towards long or short positions. When open interest increases and token prices fall, this often leads to increased volatility and increases the risk of large-scale liquidations for leveraged traders.

On Wednesday, SHIB's open interest weighted funding rate fell to 0.003%, down from Tuesday's 0.0082%. A positive funding rate means that traders holding long positions are paying fees to short parties, indicating that the market has higher demand for price increases.

The recent decline in funding rates suggests that retail traders may be cutting back on long positions. If demand for long exposure rebounds-especially as spot market activity increases simultaneously-it will help absorb the current selling pressure.

Although futures market activity is growing, falling funding rates and shrinking spot volume suggest that market confidence remains cautious. If leveraged long traders are forced to close their positions in further declines, the risk of long squeeze still exists.

Trading volume also fell, falling approximately 17% to US$41.21 million from US$50.2 million on Tuesday. Current turnover is well below the US$859.5 million reported on July 27, the highest single-day volume since June 2025.

Weak trading volume reflects limited overall market participation. Without the strong boost from spot buying, the increase in derivatives activity alone will not be able to support sustained price recovery. A surge in volume will signal a return of buyers and could help SHIB challenge near-term resistance.

Technical: The downward trend continues

SHIB continues to show a bearish trend, holding steady around US$0.0000450 and trading below the downward 50-day, 100-day and 200-day index moving averages (EMA). This multi-cycle moving average arrangement suggests that bears still dominate.

If SHIB can regain its footing above these key moving averages, downward pressure may begin to ease. The 4-hour Relative Strength Index (RSI) has now slipped to 40, below the neutral 50 mark, but still above the oversold threshold of 30. The RSI reading suggests that although momentum is weakening, there is room for further decline in the SHIB before entering oversold territory.

As the RSI falls, opportunistic buyers may start to step in, but oversold conditions do not guarantee an immediate reversal in prices. Near term resistance focuses on the 78.6% Fibonacci retracement level of US$0.0000462 and the 50th EMA of US$0.0000465.

A daily close above these key resistance levels will help ease short-term selling interest and give SHIB the opportunity to test the 100-day EMA of US$0.0000495. On the downside side, US$0.0000450 constitutes the main support level and is also the 100% Fibonacci retracement level. A clear break below this level could trigger a further decline to US$0.0000405.

Any upside is expected to be just a brief rebound in a larger downtrend before SHIB clearly recovers its key moving average in a large volume. This technical background emphasizes the importance of simultaneously monitoring price patterns and real-time market participation-especially as the lines between traditional brokers and emerging Web3 solutions become increasingly blurred.